Should T-Mobile put a greater emphasis on prepaid?

Leap and MetroPCS could merge. T-Mobile adds customers, but not of the more lucrative contract type. So what does this all mean for T-Mobile, the nation’s No. 4 carrier? Could they be the odd man out in a rough economy? T-Mobile ended 2008 with 32.8 million subscribers. That’s quite impressive, considering that the next closest competition, US Cellular, which has under 10 million subscribers. The gap between No. 4 T-Mo and No. 3 Sprint, however, is quite wide itself. Sprint ended 2008 with 53.8 million subscribers, giving them an over 20 million advantage. That’s probably not much less than the gap between T-Mo and U.S. Cellular. If what we heard yesterday is true, that Sprint is picking off T-Mobile customers via Boost Mobile, T-Mo could be in some trouble. Not only would that mean they’re losing subscribers, but that they’re losing subscribers to the carrier directly ahead of them. That doesn’t sound like an attractive proposition to T-Mo. What should they do? I’m just a guy who writes about this, but given my years of reading on the industry, my general economic knowledge, and the state of the industry and the state of the economy, it would seem like T-Mo might want to play to it’s strength, which appears to be prepaid. It might not get them the big ARPU they seek, and they might not be able to offer cool phones like the G1. Given the climate, though, they just might have to make this kind of decision sometime in the near future.]]>